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Friday, October 13, 2017

Global Shale Law Compendium – Shale Law Governance in Australia (Western Australia, South Australia, and Queensland)

Written
by Chloe Marie – Research Fellow

The Global Shale Law Compendium
series addresses legal developments and other issues related to the governance
of shale oil and gas activities in various countries and regions of the world.
In this article, we will highlight governance actions taken by some of the
states in Australia to develop policies specific to shale gas development. In a
previous
article,
we addressed shale gas development in the states of New South Wales, Victoria, and
Tasmania, as well as the Federal Northern Territory.

Western Australia

The
Government of Western Australia (WA) estimates that there are around 280 Tcf of
potential shale gas resources located in the Canning and Perth Basins. It also
identifies potential resources in the Carnarvon and Officer Basins, but those
remain “still underexplored.” The Government declared that 17
exploration wells were drilled in Western Australia from 2005 to 2012, of which
13 were hydraulically fractured.

Recognizing
this great potential, the WA Department of Mines and Petroleum released new
draft regulations on May 30, 2014, with the purpose of strengthening its
existing regulatory framework for onshore oil and gas activities in Western
Australia as well as addressing issues specific to shale gas development. Those
regulations were adopted on July 1, 2015.

In
the meantime, on August 7, 2013, the WA Standing Committee on Environment and
Public Affairs proposed to investigate the implications for Western Australia
of hydraulic fracturing for unconventional gas in order to answer multiple
concerns raised among the WA community. The WA Standing Committee released said
report in November 2015
and stated that “the purpose of this inquiry has been to provide a
comprehensive body of factual information and findings to assist the Parliament
of Western Australia, future decision makers and the public in their
contemplation of this industry.”

As
part of its findings and recommendations on several key areas, the Committee
found that “many of the concerns expressed by the community in relation to the
impact of hydraulic fracturing for unconventional gas can be addressed through
robust regulation and ongoing monitoring.” The Commission also recommended that
the “Government establish a working group, including land owner representatives
and community leaders, to draft legislation for a statutory framework for land
access agreements between land owners and resource companies.”

In
its response to the inquiry,
the Western Australian State Government supported most of the recommendations
expressed by the Committee and agreed to further work on the current
regulations. It did not agree, however, on establishing a statutory body to act
as an independent arbiter for land owners and resource companies in land access
negotiations involving shale gas development. The Government stated that
“mechanisms for negotiating access agreements with landholders have developed
significantly since the Committee report.”

The
discussion relating to shale gas development in Western Australia, however,
took a new turn with the appointment of a new Premier in March 2017. Indeed,
during the state election campaigns, Premier Mark McGowan clearly stated his
intention to stand against the use of hydraulic fracturing in Western Australia.
Subsequently, on September 6, 2017, a ban on hydraulic fracturing was implemented
for unconventional gas covering all existing and future petroleum titles in the
South-West, Peel and Perth metropolitan regions in Western Australia until further
review has been performed on the potential impacts of hydraulic fracturing.

South Australia

The
South Australia State Government has indicated that “early
indications show that the Cooper Basin could potentially produce more than 200
Tcf [of shale gas resources]” and that “several unconventional reservoir
plays are being actively explore for gas/oil by more than 20 companies in South
Australia.” Originally, shale gas exploration in South Australia started in
October 2012, but the developmental phase has not yet begun.

The South
Australian State Government was the first state to publish a comprehensive plan
for the development of its shale gas resources.This plan, published in December 2012 and entitled Roadmap
for Unconventional Gas Projects in South Australia, contains a great
number of recommendations to maximize the developmental potential while
minimizing impacts.

As in Western
Australia, the South Australian Parliament’s Natural Resources Committee
initiated in November 2014 an investigation relating to the impacts of
hydraulic fracturing activities in the South East of South Australia. The
Committee released a Final
Report on November 29, 2016, and made a total of 5 recommendations and 10
findings. The Committee found that “the natural gas industry does not currently
have social licence to operate in the South East, and in the committee’s
opinion unconventional gas exploration and development should not proceed
without it.” The South Australian State Government provided responses to the
recommendations on March 30, 2017, and confirmed that those recommendations
would be taken into consideration in any future review of the State Petroleum
and Geothermal Energy Act of 2000.

Queensland

According
to the Queensland State Government,
shale gas exploration and development is still at a very early stage in
Queensland despite having some promising potential in the Isa Superbasin,
Maryborough, Georgina, Cooper and Eromanga basins. Until now, just over 20
exploration wells have been drilled in Queensland to evaluate the shale gas
reserves.

Interestingly,
on August 24, 2008, the Government of Queensland introduced a 20-year
moratorium on developing the McFarlane oil shale deposit located in the
Whitsunday Region of Queensland pending review of the potential risks
associated with shale oil development on the environment. On February 13, 2013,
the Government continued the 2008
moratorium, which is scheduled to end in 2028.

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The Center for Agricultural and Shale Law (CASL) provides information and educational programs on agricultural and shale law and policy for producers and agribusinesses, attorneys, government officials, and the general public. The Center does not provide legal advice, nor is its work intended to be a substitute for such advice and counsel.